IIF Made New Proposal On Restructured Greek Debt Coupon Rate

The Institute for International Finance has made a new proposal in its negotiations with Greece that calls for a gradual increase of the coupon rate on new Greek bonds, in a sign that the two sides may be nearing a deal on a debt writedown.

The IIF, which represents the private creditors in their talks with Greece, proposes that the new Greek bonds carry an interest rate starting below 4% and rising every two years, a European Union official familiar with the talks told Dow Jones Newswires Thursday.

“They went to Athens and didn’t pick up where they left last Friday. They’re proposing new things… a yield well below 4% that will increase biannually,” the official said.

The IIF, led by Managing Director Charles Dallara, agreed in October to negotiate a “voluntary” debt deal aimed at a 50% cut in the face value of bonds held by the private sector. But talks broke down last week over differences on the interest of the new bonds Greece will offer its creditors after the debt restructuring.

A Greek government official also confirmed that talks, which resumed Wednesday, were now around a new proposal.
“We are discussing a proposal for a coupon starting at around 3.6%-3.7% which will progressively increase over time. Dallara will put this proposal to the banks and we’ll come back with their responses tonight,” the official said.

The EU official also said “there is a very good chance” that the deal will be done by Friday, opening the way for euro-area finance ministers to discuss it at their planned meeting in Brussels Monday.
The IIF declined to comment on the talks.
“Negotiations are ongoing today and with the prime minister later and there’s no comment at this stage,” Frank Vogl, a spokesman for the IIF said.(source: Dow Jones)